Small towns in western NSW have to work with governments to determine how to overcome shortages in health care and education, revealed in a report released on Thursday.

The Research Australia Institute’s Pillars of Communities report card found there were gaping shortages in dentistry, preschool teaching and psychologists.

The RAI gave small towns an F in all three categories, preschool teachers, dentists and psychologists, after comparing the number of professionals in small towns across Australia, compared to 30 year ago.

The report looked at towns based on location to capital cities, classifying them as an inner regional area, outer regional area, remote or very remote area.

Most Western NSW towns fell in the outer regional or remote areas.

“What the report shows is if Western NSW towns are struggling to find, attract or retain professionals in their town they aren’t alone,” RAI CEO Jack Archer said.

“It’s a really important issue. We talk about small towns as if they are disappearing but that’s not the case, small towns still make up one-third of Australia’s population.”

A drop in preschool teachers was one of the ‘big surprises’ to come from the findings, he said, with just 16 per cent of towns having access to one.

The guide used by the RAI to determine how small towns are classified. Photo: AUSTRALIAN BUREAU OF STATISTICS

“Preschool teachers had a stronger presence in small towns in 1980 than the national average but that has turned around. It coincides with higher rates of early childhood development issues in rural and remote areas,” he said.

“We see the same pattern in dentistry and mental health which are also areas where regional outcomes have been poor for a long time.”

While Mr Archer said government funding and its effectiveness had to come into question because of the findings, it was also important that communities see if there are underlying issues.

“One local community found that a lack of housing was stopping people from coming to town so sometimes it can be a unique local issue, instead of or in addition to policy issues,” Mr Archer said.

Health, education services in small towns get F on report card

How small towns' services have changed between 1981 and 2011. Figure: REGIONAL AUSTRALIA INSTITUTE

Proportion of small towns with service delivery professionals within the community. Figure: REGIONAL AUSTRALIA INSTITUTE

How the rate of psychologists per capita has changed between 1981 and 2011. Figure: REGIONAL AUSTRALIA INSTITUTE

How the rate of preschool teachers per capita has changed between 1981 and 2011. Figure: REGIONAL AUSTRALIA INSTITUTE

Percentage of services available for small towns 1981-2011. Figure: REGIONAL AUSTRALIA INSTITUTE

Rate of service delivery professional per 100,000 population in 2011. Figure: REGIONAL AUSTRALIA INSTITUTE

The number of general practitioners per capita. Figure: REGIONAL AUSTRALIA INSTITUTE

He hoped the report would go some way towards identifying problems and fixing them, to help towns prosper.

"Improving outcomes has an economic flow on because it will encourage people to stay in that community and give others the confidence to move there, if they have adequate access to services,” Mr Archer said.

“It can have a crucial impact on population growth and retention at a time when small towns across Australia need it.”